Riverside Construction Company v. Entergy Mississi ( 2015 )

Case: 15-60252 Document: 00513198145 Page: 1 Date Filed: 09/17/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 15-60252 FILED
Summary Calendar September 17, 2015
Lyle W. Cayce
Clerk
RIVERSIDE CONSTRUCTION COMPANY, INCORPORATED,
Plaintiff - Appellant
v.
ENTERGY MISSISSIPPI, INCORPORATED,
Defendant - Appellee
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:13-CV-876
Before REAVLEY, SMITH, and HAYNES, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellant Riverside Construction Company, Inc. appeals from
the district court’s denial of its motion for attorneys’ fees and expenses under
28 U.S.C. § 1447(c). We AFFIRM.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 15-60252 Document: 00513198145 Page: 2 Date Filed: 09/17/2015
No. 15-60252
I. Background
In 2008, Defendant Entergy Mississippi, Inc.’s Dolphin Fender System
(“the Dolphin System”), 1 located on its fuel dock in the Mississippi River, was
damaged in an allision with a barge. Entergy contracted with Riverside to
repair the Dolphin System at a price not exceeding $176,585.62. The cost to
repair the Dolphin System eventually exceeded $1 million, which Entergy
refused to pay.
Riverside then filed suit against Entergy in state court for breach of
contract, quantum meruit, and unjust enrichment. Entergy removed the case
to federal court, contending that the suit invoked the court’s maritime (or
admiralty) jurisdiction because the suit involved a federal maritime contract.
See 28 U.S.C. § 1333. The district court disagreed, concluding that the contract
at issue was not a maritime contract, and remanded the case to state court.
See 28 U.S.C. §1447(c). The district court also held that even if the suit did
implicate federal maritime jurisdiction, the “saving to suitors” clause of 28
U.S.C. § 1333(1) necessitated remand. See 28 U.S.C. § 1333. Riverside then
filed a motion for attorneys’ fees and expenses under 28 U.S.C. § 1447(c), which
permits the district court to award the costs incurred by a plaintiff as a result
of removal. The district court denied Riverside’s motion, concluding that
although removal was ultimately improper, Entergy had an objectively
reasonable belief that it was proper and removed the suit in good faith.
Riverside timely appealed the district court’s denial of its motion for attorneys’
fees and expenses.
1 The Dolphin System is a structure placed in a waterway near a dock system that is
used to moor vessels and protect the adjacent dock from damage.
2
Case: 15-60252 Document: 00513198145 Page: 3 Date Filed: 09/17/2015
No. 15-60252
II. Standard of Review
A decision by the district court to grant or deny attorneys’ fees and costs
pursuant to 28 U.S.C. § 1447(c) is reviewed for an abuse of discretion. Valdes
v. Wal-Mart Stores, Inc., 199 F.3d 290, 292 (5th Cir. 2000). When the district
court remands a case to state court, it may award the non-removing party its
attorneys’ fees and expenses incurred as a result of the removal, but a district
court should typically, absent unusual circumstances, decline to award fees
where the defendant had an “objectively reasonable basis for removal.” Martin
v. Franklin Capital Corp., 546 U.S. 132, 136 (2005). In determining whether
a defendant had objectively reasonable grounds for removal, we “evaluate the
objective merits of removal at the time of removal.” Valdes, 199 F.3d at 293.
The mere fact that a district court ultimately concludes that removal was
improper is not a sufficient ground for awarding attorneys’ fees. Id. at 292.
III. Discussion
Riverside appeals the district court’s denial of its motion for attorneys’
fees and expenses, contending that the district court erred in concluding that
Entergy had an objectively reasonable basis for removal. In defending its
removal of the suit, Entergy argued that the contract Riverside allegedly
breached was a maritime contract, thus giving the district court federal
question jurisdiction under 28 U.S.C. § 1333. Entergy contends now that,
although the district court ultimately concluded that removal was improper,
Entergy had both factual and authoritative support for arguing that its
contract with Riverside was a maritime contract. Entergy also argues that the
“saving to suitors” clause did not necessarily bar removal of a maritime suit
because defects in removal jurisdiction are waivable.
A contractual dispute invokes admiralty jurisdiction when the
underlying contract is a maritime contract. J.A.R., Inc. v. M/V Lady Lucille,
963 F.2d 96, 98 (5th Cir. 1992). This circuit has recognized that it is often
3
Case: 15-60252 Document: 00513198145 Page: 4 Date Filed: 09/17/2015
No. 15-60252
difficult to distinguish between maritime and non-maritime contracts. Theriot
v. Bay Drilling Corp., 783 F.2d 527, 538 (5th Cir. 1986). A contract is a
maritime contract when it “relat[es] to a ship in its use as such, or to commerce
or navigation on navigable waters, or to transportation by sea or to maritime
employment.” Gulf Coast Shell & Aggregate LP v. Newlin, 623 F.3d 235, 240
(5th Cir. 2010) (emphasis added) (quoting J.A.R., 963 F.2d at 98). A contract
is not a maritime contract merely because a vessel is involved. Richard
Bertram & Co. v. The Yacht, Wanda, 447 F.2d 966, 967 (5th Cir. 1971). Rather,
the contract must be directly linked to the operation of a ship. Theriot, 783
F.2d at 538 (citation omitted).
In support of its contention that its contract with Riverside implicated
maritime jurisdiction, Entergy argued before the district court that (1) the
contract contemplated that work would be performed from a floating barge on
a structure that was integral to maritime commerce and situated within the
navigable waters of the United States, and (2) the Dolphin System was an
integral part of the fuel unloading/loading facility and was thus necessary to
allow marine vessels transporting goods over navigable waters to moor at the
dock in a safe manner. It was undisputed that all repair work pursuant to the
contract would be conducted on navigable waters through the use of barges.
Although a contract is not maritime merely because it involves a vessel, the
Fifth Circuit has held that the use of a barge as a vessel can render a contract
maritime in nature. See, e.g., Theriot, 783 F.2d at 538–39 (concluding that a
submersible drilling barge constituted a vessel such that contract was
governed by maritime law). Entergy relied on a series of cases recognizing
barges as vessels. See, e.g., Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313,
316–17 (5th Cir. 1990); Theriot, 783 F.2d at 538. Entergy also argued that the
fact that a vessel was used to transport Riverside’s workers from land to the
barge across navigable waters rendered the contract maritime in nature. See
4
Case: 15-60252 Document: 00513198145 Page: 5 Date Filed: 09/17/2015
No. 15-60252
Laredo Offshore Constructors, Inc. v. Hunt Oil Co., 754 F.2d 1223, 1231 (5th
Cir. 1985) (“An agreement to transport people and supplies in a vessel to and
from a well site on navigable waters is clearly a maritime contract.”). Finally,
Entergy argued that the dock’s location in navigable waters and the Dolphin
System’s critical role in facilitating interstate commerce rendered the contract
maritime.
Ultimately, the district court distinguished the instant suit by noting
that the barge here was tethered to a bank and operated as a stationary
platform, as opposed to a barge engaged in transportation. See Daniel v.
Ergon, Inc., 892 F.2d 403, 407 (5th Cir. 1990) (stating that floating platforms
are not vessels if they are primarily used as work platforms, they are moored,
and any movement across navigable waters is incidental to their intended use
as work platforms); see also Leonard v. Exxon Corp., 581 F.2d 522, 524 (5th
Cir. 1978). The district court also concluded that the barge and the transport
vehicles were auxiliary to the actual purpose of the contract—repair of the
Dolphin System. See Laredo, 754 F.2d at 1231–32 (holding that a contract was
not maritime where it required the transport of employees across navigable
waters because that was not the primary purpose of the agreement). The mere
fact that the district court concluded that removal was improper does not
warrant an award of attorneys’ fees under § 1447(c). See Valdes, 199 F.3d at
292. Entergy presented the district court with colorable arguments, supported
by facts and authority, that its contract with Riverside was a maritime
contract. See, e.g., Lee v. Advanced Fresh Concepts Corp., 76 F. App’x 523, 524–
25 (5th Cir. 2003). 2
2 Although Lee is not “controlling precedent,” it “may be [cited as] persuasive
authority.” Ballard v. Burton, 444 F.3d 391, 401 n.7 (5th Cir. 2006) (citing 5TH CIR. R.
47.5.4).
5
Case: 15-60252 Document: 00513198145 Page: 6 Date Filed: 09/17/2015
No. 15-60252
Riverside argues, however, that even if there was a reasonable basis for
arguing that admiralty or maritime jurisdiction existed, Entergy still lacked
an objectively reasonable basis for removal because the “saving to suitors”
clause in 28 U.S.C. § 1333(1) prohibits removal of maritime cases from state
court. The “saving to suitors” clause permits a plaintiff whose admiralty or
maritime case does not fall within the federal court’s exclusive admiralty
jurisdiction to bring a claim “at law” in state court. Luera v. M/V Alberta, 635
F.3d 181, 188 (5th Cir. 2011). This circuit has held that maritime claims
brought in state court under the “saving to suitors” clause are not removable,
unless a separate statute provides an independent basis for federal
jurisdiction. Morris v. T E Marine Corp., 344 F.3d 439, 444 (5th Cir. 2003)
(citing Romero v. Int’l Terminal Operating Co., 358 U.S. 354, 377–79 (1959)).
There is disagreement among district courts in this circuit, however,
regarding whether general maritime claims are removable, even absent an
independent basis for jurisdiction, in light of Congress’s December 2011
amendment to 28 U.S.C. § 1441(b). See, e.g., Boudreaux v. Global Offshore
Res., LLC, No. 14-CV-2508, 2015 WL 419002, at *1 (W.D. La. Jan. 30, 2015)
(noting that the issue of whether maritime claims are removable absent an
independent basis for subject matter jurisdiction after the amendment is “hotly
contested”); Ryan v. Hercules Offshore, Inc., 945 F. Supp. 2d 772, 777–79 (S.D.
Tex. 2013) (explaining how the amendment of § 1441(b) affects the
determination of when removal jurisdiction exists and holding that admiralty-
only cases can now be removed to federal court); Butler v. RLB Contracting,
Inc., No. 3:14-CV-112, 2014 WL 1653078, at *1 (S.D. Tex. Apr. 24, 2014); see
also 14A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER,
FEDERAL PRACTICE AND PROCEDURE § 3674 (4th ed. 2013). The Fifth Circuit
has not yet spoken directly on this issue. Cf. Barker v. Hercules Offshore, Inc.,
713 F.3d 208, 223 (5th Cir. 2013) (describing the 2011 amendment to 28 U.S.C.
6
Case: 15-60252 Document: 00513198145 Page: 7 Date Filed: 09/17/2015
No. 15-60252
§ 1441(b) as a “recent clarification” and noting that “cases invoking admiralty
jurisdiction under 28 U.S.C. § 1333 may require complete diversity prior to
removal” (emphasis added)). In light of this apparent uncertainty, Entergy
had an objectively reasonable basis for removal. 3 Cf. Vatican Shrimp Co. v.
Solis, 820 F.2d 674, 680–81 (5th Cir. 1987) (concluding that a district court
erred in awarding sanctions against a removing party where uncertainty
existed regarding the propriety of removal of a Jones Act case filed in state
court under the “saving to suitors” clause).
Additionally, as Entergy correctly notes, a case that is improperly
removed under § 1331(1) suffers from a procedural defect, rather than a
jurisdictional defect, and such a defect may be waived if the plaintiff fails to
timely move for remand. See Williams v. AC Spark Plugs Div. of Gen. Motors
Corp., 985 F.2d 783, 787 (5th Cir. 1993); see also Baris v. Sulpicio Lines, 932
F.2d 1540, 1543–44 (5th Cir. 1991) (“The plaintiffs have confused improper
removal (i.e., lack of removal jurisdiction) with lack of original subject matter
jurisdiction. The former is waivable . . . the latter is not.” (citations omitted)).
Thus Entergy could not have known at the time of removal whether Riverside
would object to the removal of the case, or would waive its objection. 4
We conclude that the district court did not abuse its discretion in
concluding that Entergy had an objectively reasonable basis for attempting to
3 We note that we do not decide the effect, if any, of Congress’s 2011 amendment of
§ 1441(b) on a party’s ability to remove a maritime case absent an independent basis for
jurisdiction. We only observe that this issue is “hotly contested” and unresolved, because
that affects whether Entergy had an objectively reasonable basis for removal. See Vatican,
820 F.2d at 680–81.
4 Entergy appears to reurge its argument, initially made before the district court, that
Riverside waived its procedural objection to removal based on the “saving to suitors” clause
because Riverside did not assert this ground for remand until it filed its reply brief, 57 days
after Entergy removed the case. Because we conclude that the district court did not abuse
its discretion in concluding that Entergy had an objectively reasonable basis for removal, we
need not reach this issue.
7
Case: 15-60252 Document: 00513198145 Page: 8 Date Filed: 09/17/2015
No. 15-60252
remove this case to federal court such that fees and expenses should be denied.
See Valdes, 199 F.3d at 294. The district court’s order is therefore AFFIRMED.
8